Before proceeding with an account of the standard institutions of fire
and life insurance, it is proper to glance at the modern vast extension
of casualty insurance, and to notice certain novel applications of the
insurance principle to other special classes of events. The novelty of
these enterprises, however, is not in the general idea underlying each
of them. In almost every instance in which insurance has been extended,
so as successfully to cover new kinds of risks, it will be found that
the suggestion is nearly as old as the practice of life insurance. Many
more kinds of insurance than are even now found useful were attempted
more than a century ago. But no statistical basis then existed for
determining the probability of loss from various casualties, nor had the
methods of canvassing, accounting, proving and checking losses, reached
the perfection now recognized as necessary for efficiency and safety.
The various branches of business which, in distinction from the great
standard institutions of life, fire and marine insurance, are commonly
treated as miscellaneous insurance, differ widely in their subjects and
methods. The most general of them, and that most widely known, is
insurance against personal injury by accidents of every kind. Much has
already been done by the companies in collecting and analysing facts, so
as to determine the average risk of injury and disablement among
different classes of men. But there is as yet no such union of effort
among them to combine their resources for such purposes as among the
life companies, nor does the subject admit of treatment so exact as that
of human mortality. Hence it is impossible to speak of a theory of
accident insurance in a scientific sense; and in its practice premiums
and necessary reserves are determined by the trained business judgment
of individual managers rather than by the calculations of actuaries from
statistical collections of facts.
The insurance of railway travellers against injury upon trains was the
first form of accident insurance which proved widely acceptable. This is
still practised as a special business by several companies, tickets,
entitling the purchaser or his family to a fixed compensation in case of
his injury or death, being offered for sale with the railway tickets.
But the development of insurance against personal injuries, which is
most characteristic of the times, is the wholesale insurance of the
employer against liability to the employed for accidental injuries
sustained in his service. This was first undertaken on a large scale by
the "Employers' Liability Assurance Corporation of London," founded for
the purpose in 1880, immediately after the passage of the Employers'
Liability Act by parliament, which made employers of labour liable for
injuries sustained in their service to an extent unknown to the common
law. The Workmen's Compensation Act 1906 greatly extended the classes of
employers liable for accidents to their servants, and the number of
companies devoting themselves to accidents and workmen's compensation
has greatly increased, while practically every fire insurance office has
taken up the business. The policies are issued to employers of labour,
agreeing to indemnify them for any loss to which they may be subjected,
at common law or by statute, in consequence of bodily injuries suffered
by any employee while engaged in their service. In some cases the
insurance company undertakes the investigation and settlement of each
claim within the limits prescribed by the policy, and conducts any
litigation which may result. The adjustment of damages can be made with
more economy and skill by the companies than is usually possible for the
employer, and the danger of fraudulent claims is largely reduced by
methods experience has taught them. The price charged for such insurance
is either a small percentage of the aggregate wages paid during the
term, or a standard rate for each particular class of employment, or
(in the case of large employers of labour) an "all-round" rate designed
to cover every class of employee.
The most common form of accident insurance, however, is still
represented by the policy which promises the assured a fixed sum in
case of death by accident, and a weekly compensation during disability
from such a cause. Many policies also specify a sum to be paid for the
loss or permanent damage of a member, as an eye, a hand or foot.
Another extension of the personal accident policy is the addition of
some form of health insurance, especially the grant of a weekly sum to
the insured during incapacity for work caused by certain named
diseases. Besides the ordinary joint stock companies which carry on
this class of business with fixed premiums, many associations organize
for insurance against personal injury by accident, relying upon the
assessment of members to pay claims as they mature. Many of these are
local and ephemeral; but a number of them, formed by men engaged in
common pursuits, for mutual protection, have attained importance. Such
are especially some of the commercial travellers' and the railway
employees' accident associations, and a few connected with the Masonic
or similar beneficiary orders.
Another large class of casualty insurances applies to various forms of
damage to property. The branch which seems most to have attracted
promoters is the insurance of plate glass against fracture, which is
carried on by a number of companies in Great Britain, and is the only
business of several of them. In the United States there are five
corporations which insure plate glass alone, while many other casualty
companies issue also policies on glass. This business is not conducted
in any other country upon so large a scale as in the United States,
but is attracting more attention than heretofore in Europe, and
especially in Great Britain.
There are several companies in the United Kingdom and in America which
make the insurance against damage by the explosion of steam boilers a
special feature of their work, but by far the greater part of the
business is transacted by one company in each country. The service
rendered is one of special skill and vigilance, extending far beyond
the contract for indemnity. The company, in fact, employs inspectors
of the highest scientific qualifications, who assume constant
supervision of the machinery, and require its structure and conduct to
be freed from elements of danger. It is prevention rather than
compensation that is sought, and the outlay made by the companies is
mainly for inspection and control, not for losses. It is usual to
promise in a policy upon a steam boiler some compensation also for any
personal injury which may result from an explosion.
There are some companies in England having insurance against burglary
for their principal purpose, while several of the British and American
accident companies issue policies of this kind. It is somewhat of an
experiment, and the risks taken are for moderate sums, at premiums
determined in each case by an estimate of the danger founded on a
study of all the circumstances. There is no information published
concerning this branch of insurance in other countries, but the
aggregate premiums paid are not at present very large. It is believed
by many that there is an important future for burglary insurance, in
connexion with improved methods of protection, by safes, automatic
alarms and constant inspection, for dwelling-houses, shops and
offices, which are often unoccupied.
Insurance against damage to growing crops by hail is practised in
several parts of Europe and America, commonly by small local
associations on the mutual plan or as an incident to the business of
fire insurance. No statistics can be obtained of these operations. The
same is true of the insurance against the ravages of tornadoes, and
against sickness and accident in domestic animals.
A wholly distinct business, commonly classed as a branch of insurance,
has now grown to great importance, that of guaranteeing the fulfilment
of contracts and of indemnifying employers against defalcations in
their service. The bond of a corporation of large capital is widely
taking the place which personal surety has filled in connexion with
undertakings on contract, and with offices and occupations of trust,
both in public and in private life. Fidelity insurance is carried on
by a few of the general casualty companies, but as the practice of it
extends it becomes more and more the work of special institutions
organized for this purpose alone. In the United States there are many
corporations of excellent standing, with aggregate paid-up capital of
more than $15,000,000 and surplus funds of nearly $10,000,000 more,
and collecting in premiums about $4,000,000 annually upon bonds and
guaranties amounting to more than $1,250,000,000. The business
practically only started at the close of the 19th century. It has had
similar if not equal development in Great Britain and in several other
countries, but it is only in the United States that the statistics of
it are officially collected.
The insurance of titles to real property is also becoming widely
extended. This business, however, has indemnity for losses as but an
incidental purpose. The principal aim is to furnish a final and
responsible assurance that the title is flawless. Several of the
companies in the United States possess elaborate and expensive
collections of records, covering the sources of title for cities or
large districts; all of them employ expert ability of a high order;
and when they approve a title as perfect, the purchaser or lender of
money may receive, with the approval, a guaranty against loss in
accepting it, which private examiners or counsel cannot give. Titles
are insured also in other countries, but the business has nowhere else
attained such importance, nor do the institutions transacting it make
full and separate statements of their accounts. Other minor forms of
insurance are against bad debts, bonds and securities in transit,
earthquakes, failure of issue, loss on investment, leasehold
redemption, non-renewal of licences, loss of or damage to luggage in
transit, damage to pictures, loss of profits through fire, imperfect
sanitation, birth of twins, &c.